Human Rights and the Multinational Enterprise

Elisa Giuliani, University of Pisa, ItalyGrazia D. Santangelo, University of Catania, ItalyFlorian Wettstein, University of St. Gallen, Switzerland

SUPERVISING EDITOR

Günter K. Stahl, Vienna University of Economics and Business

The 1948 Universal Declaration of Human Rights and subsequent treaties define human rights as inalienable fundamental rights to which a person is inherently entitled simply because she or he is a human being. More recently, the 2015 United Nations (UN) Sustainable Development Goals and the 2011 UN Guiding Principles on Business and Human Rights contribute to the promotion of the human rights agenda in the business sector. The UN initiatives add to a number of other initiatives, e.g., by the Organization for Economic Co-operation and Development (OECD) and the International Labor Organization (ILO) to actively promote various ‘soft-law’ interventions designed to reduce corporate wrongdoing.

These initiatives have promoted rising awareness regarding the human rights conduct of Multinational Enterprises (MNEs) and other business actors, which global (social) media and global activist groups contribute to amplify. The rising awareness and expectations regarding corporate human rights conduct poses new and important challenges to MNEs operating in multiple environments with varying legitimacy requirements (Kostova and Zaheer, 1999), and dealing with human rights is rapidly becoming the new frontier of corporate social responsibility (CSR). Still, multinationals adopt very diverse approaches and strategies to cope with human rights issues. Unilever has recently issued its first Human Rights Report inspired by the idea that “business can only flourish in societies in which human rights are respected, upheld and advanced” (Paul Polman, Unilever CEO). Likewise, Nestlé CEO Paul Bulcke, in his keynote speech at the 2014 UN Forum on Business and Human Rights, in Geneva, declared that “human rights is about doing, is about how we behave – every day, everywhere”. Such initiatives seem to suggest that MNEs progressively speak the human rights language and human rights issues are becoming central to MNEs’ CSR agenda. At the same time, infringements on human rights by large MNEs remain prevalent. This has been the case, among many others, of the Apple-Foxconn labor rights scandal denounced in the New York Times in 2012, and the infringement of the rights of indigenous communities by the Brazilian mining multinational, Vale, in connection to the Belo Horizonte Dam project.

These contrasting conducts are still poorly understood, and call for a deeper investigation into how MNEs deal with human rights when designing their strategies, operations and organization in multiple institutional, cultural and legal environments, as well as on the drivers of MNEs’ human right conduct and on the effects of such a conduct on corporate competitiveness.

While there is a lively and established scholarly debate on business and human rights, research in international management and international business has not picked up systematically on the subject as of yet. Rather, it has focused more narrowly on related topics such as corporate corruption, or more broadly on CSR strategies and MNEs’ environmental conduct (Cuervo-Cazurra, 2006; Rabbiosi and Santangelo 2014; Van Tulder and Kolk, 2001; Kolk, 2010; Zheng, Luo and Maksimov, 2015). As a result, to date our knowledge on MNEs’ human rights conduct is mainly derived from other fields, such as international law, political science and international relations (for a review see Giuliani and Macchi, 2014), and from business ethics (Doh, Husted, Matten and Santoro, 2010; Arnold 2010; Wettstein 2012). However, we still lack a full understanding of MNEs’ human rights conduct in connection with traditional international management and international business issues. For example, questions about the role played by individuals in key organizational positions (e.g. expatriates and inpatriates) in determining MNEs’ human right conduct, as well as questions about how headquarters (HQ)-subsidiary relationships influence the decision-making process around human rights issues, are largely under-investigated. So are questions connected to MNEs’ human rights conduct in relation to the liability of foreignness and country of origin disadvantage. At the same time, there is very little theory development and empirical evidence on the efficacy of MNEs’ CSR strategies for substantially enhancing the promotion of human rights both at home and in the host countries. For example, although there is a growing body of research examining how MNEs respond to the dual pressures of global integration and local responsiveness with regard to CSR and ethics (e.g., Husted & Allen, 2006; Muller, 2006; Miska, Witt, & Stahl, forthcoming), little is known about the conditions promoting a transnational approach to human rights that recognizes “both universal moral limits and the ability of communities to set moral standards of their own” (Donaldson & Dunfee, 1999: 50). Our knowledge on the influence of the home, host and meta-environment on MNEs’ human rights conduct remains scant. More theoretical and empirical analyses are needed to investigate whether MNEs respecting and promoting human rights outperform competitors that are less caring. Finally, we still need to learn about lobbying strategies and business-government interactions of MNEs in connection to human rights as well as on the effect of current and planned transnational initiatives to regulate human right conduct across borders.

This special issue intends to address these gaps by serving three objectives. First, the special issue aims to build an international management and international business theoretical perspective on the topic by promoting cross-disciplinary research on MNEs and human rights, and by taking stock of extant knowledge. Second, the special issue aims to encourage research proposing conceptual frameworks and theoretical perspectives useful to understand drivers and effects of MNEs’ human rights conduct, as well as to develop effective managerial implications and suggestions for policy-making. A third aim of the special issue is to start drafting a research agenda on MNEs and human rights that international management and international business scholars can further develop in the forthcoming years.

The special issue solicits both theoretical and empirical contributions, which draw on different research streams and disciplines, including international management, international business, business ethics, international law, political science and business and human rights. Methodologically, the issue welcomes qualitative, quantitative, and mixed-method research approaches. It is expected that empirical studies explicitly contribute to set a theoretical agenda. In particular, we welcome submissions addressing, among others, questions related to the factors that influence MNE human rights conduct, and on the effects of MNE human rights conducts, as elaborated below:

Drivers of MNE human rights conduct

The role of expatriates and inpatriates in promoting the cause of human rights in foreign subsidiaries. Under what conditions do expatriates promote a universal versus a relativistic perspective on human rights?

Embedding human rights in corporate culture. How can respect for human rights become embedded as part of a corporation’s culture, identity, and character? How can corporations change their own internal compass to infuse respect for human rights as part of corporate objectives and missions?

MNEs’ human rights conduct and transfer of good human rights practices within the multinational network. Does the adoption of international codes of conduct and/or other principle-based initiatives (UN Global Compact, OECD Guidelines) by HQs ensure human rights respect and promotion also by foreign subsidiaries? How do HQs strategically transfer good human rights practices to foreign subsidiaries?

MNE’s human rights conduct across different institutional environments. Why and under what circumstances do MNEs infringe on the human rights of home or host country’s stakeholders? In what way do institutional, cultural and legal differences between home and host environments facilitate or prevent such violations in one or both environments? To what extent do MNEs play opportunistically and exploit different institutional, cultural and legal environments by lowering their human rights standards? Will such opportunistic strategies remain viable given the rising global awareness of human rights?

Liability of foreignness and human rights. The need to overcome the liability of foreignness may pose strategic choices, potentially conflicting with human rights promotion and respect in foreign countries. How does MNEs’ liability of foreignness influence the human rights conduct of foreign subsidiaries?

Country of origin and human rights. MNEs originating from institutionally weak countries face the double challenge of overcoming preconceptions about their country of origin reputation in relation to human rights and adjusting to more institutionally demanding host countries. In such contexts, do Non-Governmental Organizations (NGOs) and global activist groups play a role in mitigating these firms’ liabilities? What strategies do MNEs enact to align with most demanding institutional environments?

CSR and human rights. Can MNEs promote business conduct, which is respectful of human rights in multiple legal and institutional settings through a single CSR strategy? How does the adoption of different CSR strategies (e.g., global, local or transnational CSR strategies) influence MNEs’ human rights conduct across different institutional environments?

Market competition and human rights. Does a strong home or host market competition encourage respect or infringements of human rights by MNEs?

Differentials in human rights conduct across different types of MNEs. Do state-owned and private MNEs show different human rights conduct in different institutional contexts? Does the human rights conduct of advanced country MNEs differ from that of emerging country MNEs?

Implications of current business and human rights policy debates for multinational business. Current discussions on a potential international treaty for business and human rights may influence MNEs’ process of implementation of the UN Guiding Principles. What are the implications of such a scenario for the human rights conduct of MNEs, and for Governments.

Effects of MNEs human rights conduct

Effects of infringements of human rights. What are the consequences of MNEs’ infringements of human rights for their competitiveness, and how does such a behavior affect MNEs relationships with key home and host country stakeholders (e.g. consumers, indigenous communities, local NGOs and government) as well as with stakeholders in the meta-environment (e.g. global NGOs and (social) media)? Does harmful human rights conduct by the managers in one subsidiary affect the value, reputation or profitability of other subsidiaries and of the HQ?

Political and sub-political activity and strategies of MNEs in relation to human rights. How do human rights factor into lobbying strategies and other business-government interactions of MNEs both in home and host countries? How are multi-stakeholder initiatives in the human rights realm transforming MNE’s business outlook and strategies? How are the ‘leaders’ in regard to MNE human rights conduct influencing and changing the political context in which they operate?

Empirical research on the uptake and impact of the UN Guiding Principles. How successful are the Guiding Principles in catalyzing change in multinational companies and in improving the situation on the ground for the victims of corporate human rights abuse?

Submission process

Authors should submit their manuscripts no later than submission deadline online via the Journal of World Business EES submission system at http://ees.elsevier.com/jwb. To ensure that all manuscripts are correctly identified for consideration for this Special Issue, it is important that authors select ‘SI: MNEs and Human rights’ when they reach the “Article Type” step in the submission process. Manuscripts should be prepared in accordance with the Journal of World Business Guide for Authors available on the journal web page. All submitted manuscripts will be subject to the Journal of World Business’s blind review process.

Questions about the Special Issue may be directed to the guest editors or supervising editor: